CASINO AMENDMENT FLAWED: Imposes Duties on Commission Without Funds

It also requires the Arkansas Racing Commission to spend money it doesn’t have and imposes unfunded duties on the Commission.

One of the many criticisms of Issue #4 is that the amount the Arkansas Racing Commission is required to spend on gambling addiction programs is not enough. The minimum expenditure is $200,000 per year.

Because of a flaw in Issue #4 the Commission will not receive enough money to fulfill this minimum obligation. This also means the Commission’s funds do not include anything for the cost of regulating and monitoring casinos.

Under Issue #4, applicants for a license will pay an application fee of $250,000. Only four licenses will be issued. One license will go to Oaklawn in Hot Springs and one will go to Southland in West Memphis. One license will be granted in Russellville and one will be granted in Pine Bluff.

Unless there a lot of applicants (and we don’t expect many) the Commission will only receive enough fees to fund the minimum expenditure for a few years. It gets worse. A license lasts for ten years and under Issue #4 the renewal fee is only $10,000. With only four casinos that is a total of only $40,000 and not enough to meet the commission’s required expenditure for one year let alone ten. The $40,000 does not begin to cover the Commission’s cost for regulating the casinos.

The Arkansas Racing Commission also receives a percentage of net casino gaming receipts, but all of that money must be spent on racing purses for Oaklawn and Southland. The Commission doesn’t even get anything for having to handle the money.

The state of Arkansas also receives a percentage of the net casino gaming receipts, but that money goes to the General Revenue Fund and the Commission cannot obligate any money in that fund. Money in the General Revenue Fund can only be spent by an act passed by the Arkansas General Assembly.

Issue #4 makes an empty promise when it requires the Commission to spend at least $200,000 per year on gambling addiction programs.

Will the legislature spend general revenues to bail out the Commission and provide money for the addiction programs? Will the legislature spend general revenues to regulate and monitor the casinos? They can. It takes a three-fourths vote of the House and Senate to pass an appropriation bill to spend the money.

But now you see …. the money that was supposed to go to the state to help the state budget, is more likely to be diverted to regulating the casinos and paying for problems created by the casinos. What problems would that be? Let’s begin with the gambling addiction issue and then add costs for road maintenance. Then add other expenses for addressing other problems likely to follow, such as increases in crime, bankruptcies, divorce, prostitution, and alcohol related problems.

With Issue #4 making empty promises and with draining state funds to regulate casinos and to address the problems they bring, the outcome is: CASINOS WIN – ARKANSAS LOSES